Bone quality in diabetic patients is compromised, leading to weaker bones and increased fracture risk. However, the mechanism by which this occurs in diabetic bone remains to be fully elucidated. We hypothesized that elevated glucose and glucose variation would affect the function of osteocytes, essential regulators of bone homeostasis and quality. To first test this hypothesis, we used the IDG-SW3 osteocyte-like cell line to examine the effects of glucose levels on osteocyte function and viability in vitro. We confirmed our in vitro findings using the in vivo streptozotocin-induced (STZ) diabetic rat model and ex-vivo cultured osteocytes from these rats. IDG-SW3 cells cultured under high glucose conditions displayed significantly increased Sost mRNA(100-fold) and sclerostin protein, a negative regulator of bone formation(5000-fold), compared to cells in control media. mRNA expression of osteoblast markers such as Osx, Ocn and Col1a1 was unaffected by glucose. Factors associated with osteoclast activation were affected by glucose, with Rankl being upregulated by low glucose. Opg was also transiently upregulated by high glucose in mature IDG-SW3 cells. Induction of diabetes in Sprague-Dawley rats via a single dose of STZ (70 mg/kg) resulted in elevated maximum glucose and increased variability compared to control animals (670/796 vs. 102/142 mg/dL). This was accompanied by increased Sost/sclerostin expression in the osteocytes of these animals. These results show that glucose levels directly regulate osteocyte function through sclerostin expression and suggest a potential mechanism for the negative impact of diabetes on bone quality.